Executive Summary

Zevia delivered Q2 2025 net sales of $44.5M (+10.1% YoY) and its first positive adjusted EBITDA ($0.2M), materially beating its own Q2 guidance for both net sales ($40.5–$42.5M) and adjusted EBITDA loss ($2.2–$2.9M). This outperformance was driven by distribution gains (Walmart and drug channel), successful new flavors, and lower product costs .
Gross margin printed 48.7% (up 680 bps YoY; down 140 bps sequentially), with tariffs having an insignificant impact in Q2 due to timing; management reiterated a ~200 bps tariff headwind to gross margins starting in Q3 .
FY 2025 net sales guidance was maintained at $158–$163M, while FY adjusted EBITDA loss guidance was improved to $7–$9M from $8–$11M; Q3 outlook: net sales $38–$40M and adjusted EBITDA loss $3.4–$3.9M including a $0.5M packaging redesign charge .
Catalysts: positive Q2 execution, improved FY adjusted EBITDA outlook, expanding distribution, and resonant marketing support set a constructive narrative; near-term watch items are tariff headwinds, increased Q3 marketing spend, and lapping Q4 2024 Walmart pipeline fill .

What Went Well and What Went Wrong

What Went Well

First positive adjusted EBITDA as a public company ($0.2M), aided by productivity initiatives and the timing shift of marketing spend; management identified an incremental $5M of savings in COGS and selling expenses, taking total identified savings to $20M by 2026 .
Distribution surpassed historical peak levels, with strong performance across Walmart (variety packs performing best), grocery, club (Costco rotations with record same-store sales), and drug channels; early convenience tests showed performance on par with larger peers .
Marketing and innovation resonated: the “Get the Fake Outta Here” campaign delivered record earned impressions; new flavors (Strawberry Lemon Burst, Orange Creamsicle) achieved top velocities; refreshed packaging improved in-store communication and shelf impact .
- “We are soda made better…Our distinctive marketing is driving engagement…our productivity initiative yielded $15,000,000 in annualized savings…” — Amy Taylor, CEO .

What Went Wrong

Sequential gross margin compression to 48.7% (from 50.1% in Q1) and tariff headwinds expected to reduce gross margin by ~200 bps in Q3–Q4; Q3 includes a $0.5M one-time packaging redesign charge in COGS .
Management set cautious Q4 expectations (flattish) due to lapping last year’s substantial Walmart pipeline fill, and noted an uncertain macro environment despite distribution gains .
Selling and marketing remained high ($13.4M; 30.0% of net sales), with elevated marketing investments necessary to build brand awareness; G&A rose to $8.1M on variable compensation and outside services .

Financial Results

Quarterly Progression (oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$39.458	$38.023	$44.524
Diluted EPS ($USD)	-$0.09	-$0.08	-$0.01
Gross Margin (%)	49.2%	50.1%	48.7%
Adjusted EBITDA ($USD Millions)	-$3.879	-$3.266	$0.233

Q2 2025 vs Q2 2024

Metric	Q2 2024	Q2 2025	YoY Change
Revenue ($USD Millions)	$40.426	$44.524	+$4.098 (+10.1%)
Gross Margin (%)	41.9%	48.7%	+680 bps
Net Loss ($USD Millions)	$7.0	$0.7	+$6.3 improvement
Adjusted EBITDA ($USD Millions)	-$4.374	$0.233	+$4.607 improvement

Actual vs Company Q2 Guidance (midpoint)

Metric	Guidance Midpoint (Q2 2025)	Actual (Q2 2025)	Surprise
Net Sales ($USD Millions)	$41.5	$44.5	+$3.0 (Beat)
Adjusted EBITDA ($USD Millions)	-$2.55	$0.2	+$2.75 (Beat)

KPIs

KPI	Q2 2025
Volume Growth YoY (%)	+14.3%
Cash & Equivalents ($USD Millions)	$26.3
Selling & Marketing Expense ($USD Millions)	$13.4
G&A Expense ($USD Millions)	$8.1
Repeat Rate (%) (context from Q4 2024)	≥40%

Note: Zevia reports as a single segment; no segment revenue breakdown disclosed in the quarter.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($USD Millions)	FY 2025	$158–$163	$158–$163	Maintained
Adjusted EBITDA Loss ($USD Millions)	FY 2025	-$8 to -$11	-$7 to -$9	Raised (improved)
Net Sales ($USD Millions)	Q3 2025	N/A	$38–$40	Initiated
Adjusted EBITDA Loss ($USD Millions)	Q3 2025	N/A	-$3.4 to -$3.9 (incl. $0.5M COGS charge)	Initiated

Earnings Call Themes & Trends

Topic	Q4 2024 (Q-2)	Q1 2025 (Q-1)	Q2 2025 (Current)	Trend
Marketing/Brand	Viral holiday campaign; increased spend; positive sentiment	“Get The Fake Outta Here” with Jelly Roll; 2.4B earned impressions	National campaign delivered record impressions; strong engagement	Strengthening
Product Innovation	Salted Caramel outperformed	Strawberry Lemon Burst (highest purchase intent); Orange Creamsicle; variety packs	Strawberry Lemon Burst, Orange Creamsicle top performers; pipeline expanded; packaging refresh	Accelerating
Distribution Expansion	Walmart 800→4,300 doors; DSD NW	Walgreens ~8,000 stores; Albertsons BFY set; DSD to SW	Surpassed peak distribution; strong in Walmart, grocery, club rotations; early convenience tests	Expanding
Tariffs/Macro	High-40s GM sustainable; tariff headwinds acknowledged	~200 bps GM headwind expected; timing Q2–Q3	Tariff impact minimal in Q2 due to timing; ~200 bps headwind starting Q3	Near-term pressure
DSD/Convenience	DSD pilot driving grocery outperformance; expansion planned	Single-serve tests in convenience under DSD footprint	Early convenience performance on par with larger peers; measured expansion	Early progress
Club Rotation	—	Lapping lost club distribution	Back on rotation in key Costco regions; record same-store sales	Improving

Management Commentary

CEO framing: “We are soda made better…Our distinctive marketing is driving engagement, product innovation is resonating…we are expanding our distribution with strong sell through across channels…productivity initiative yielded $15,000,000 in annualized savings with more to come.”
CFO on profitability and savings: “Adjusted EBITDA improved by $4,600,000 to $200,000…we have identified an incremental $5,000,000 in cost savings in COGS and selling expenses…bringing the total to $20,000,000.”
Outlook tone: “Maintaining full year net sales guidance $158–$163M; adjusted EBITDA loss now $7–$9M…Q3 net sales $38–$40M; adjusted EBITDA loss $3.4–$3.9M, including a $500,000 one-time charge for package redesign.”

Q&A Highlights

Sales drivers: Balanced growth from Walmart distribution, grocery spring resets (space gains, brand block), club rotations, and early performance of new flavors (Strawberry Lemon Burst top-two item; Sprouts exclusive #1) .
Productivity initiative: Incremental $5M savings identified in supply chain (COGS first, then selling/warehousing), phased realization beginning late 2025 and into 2026 .
Cadence: Q4 “flattish” expectation due to lapping substantial Walmart pipeline fill; macro caution despite strong execution .
Tariffs and GM: ~200 bps gross margin impact expected, timing starting Q3; temporary dilution in GM in Q3–Q4 offset longer-term by incremental cost savings .
Consumer metrics: Sequential step-up in household penetration and purchase frequency due to increased visibility, innovation, and repeat; focus on growing user base via marketing, innovation, and distribution .
Club/rotation: Variety packs well-suited to “treasure hunt” club environment; record same-store sales; potential for everyday placement over time .
Capital allocation: Bias to reinvest in brand/velocity while targeting positive adjusted EBITDA in 2026; demonstrating ability to invest and improve profitability concurrently .

Estimates Context

Wall Street consensus for Q2 2025 (EPS/Revenue/EBITDA) via S&P Global was not available in our pull; we benchmarked actuals against company guidance (material beats) .
Forward S&P Global consensus (latest available quarters):

Metric	Q3 2025	Q4 2025	Q1 2026	Q2 2026
Revenue Consensus Mean ($USD)	$39,529,500*	$40,089,250*	$40,479,500*	$47,605,750*
Primary EPS Consensus Mean ($USD)	-$0.05*	-$0.023*	-$0.045*	-$0.01*
EBITDA Consensus Mean ($USD)	-$3,566,670*	-$633,330*	-$1,100,000*	$1,100,000*
Target Price Consensus Mean ($USD)	$4.90*	$4.90*	$4.90*	$4.90*

Values retrieved from S&P Global.*

Implications: Consensus embeds a sequential dip in Q3 EBITDA consistent with management’s guidance (loss, increased marketing and tariff costs), and gradual improvement into 2026. Target price implies modest upside scenario contingent on execution.

Key Takeaways for Investors

Strong execution with a clear beat vs Q2 guidance and first positive adjusted EBITDA underscores productivity gains and scalable distribution/innovation model .
Gross margin resilience amid promotions; monitor Q3–Q4 margin pressure from tariffs (~200 bps) and packaging redesign charge ($0.5M), with management pointing to offsets from incremental savings .
FY outlook de-risked on adjusted EBITDA (range improved to -$7–-$9M) while revenue held; near-term modeling: Q3 lower EBITDA due to spend/tariffs; Q4 flattish net sales on pipeline fill lap .
Distribution momentum (Walmart, Walgreens, Albertsons, club) plus variety packs and new flavors are driving trial and repeat; watch convenience/DSD tests for incremental upside .
Marketing remains a key lever; campaigns and refreshed packaging align with accelerating category penetration and in-store conversion .
Balance sheet is clean ($26.3M cash; undrawn $20M revolver); affords flexibility to invest while progressing toward 2026 adjusted EBITDA positivity .
Trading setup: constructive near-term narrative (beat/guide improvement) vs known Q3 headwinds; catalysts include continued distribution gains, innovation velocity, and tangible cost savings realization .

Zevia PBC (ZVIA)·Q2 2025 Earnings Summary